The rule was not eliminated. Read the statements below. and tell me your assement
Item 3.02 Unregistered Sale of Equity Securities
On June 30, 2023, VoIP-Pal.Com Inc. (the “Company”) issued warrants to purchase an aggregate of 831,466,899 shares of the Company’s common stock (each, a “Warrant”) to Emil Malak, the President, Chief Executive Officer and a director of the Company, pursuant to the share transfer agreement between the Company, Digifonica Intellectual Properties (DIP) Limited (“DIP”) and Digifonica (International) Limited dated June 25, 2013, as amended on July 18, 2013, October 6, 2013, October 31, 2013, November 25, 2013, March 17, 2014, April 21, 2021 and April 23, 2023 (collectively, the “STA”). Pursuant to the STA, the Company is obligated to (a) issue Warrants to DIP or DIP’s assignee (in this case Mr. Malak) in a sufficient quantity such that when exercised, the shares of common stock issuable upon the exercise of the Warrants plus certain previously-issued shares of common stock held by DIP, equal 40% of the Company’s outstanding share capital, and (b) issue to DIP that number of shares of the Series A preferred stock of the Company (the “Series A Stock”) that allows DIP to retain voting rights equivalent to the same 40% interest. Each Warrant is exercisable into one share of the Company’s common stock at a price of $0.001 per share for a period of 10 years.
In connection with the foregoing, on June 30, 2023, the Company issued an aggregate of 138,420 shares of Series A Stock (collectively, the “Shares”) to Mr. Malak for nominal consideration.
The Company granted options to purchase an aggregate of 75,000,000 shares of the Company’s common stock (collectively, the “Options”) to certain directors, officers and consultants of the Company (collectively, the “Optionees”). Each Option is exercisable into one share of the Company’s common stock at a price of $0.005 per share for a period of five years and is subject to the terms of the Company’s incentive stock option plan. The Options are exercisable on a cashless basis subject to certain conditions as more particularly described in the Company’s current report on Form 8-K dated May 10, 2023. Of the Options, 65,000,000 vested immediately, while the balance of 10,000,000 vest as set forth in Item 5.02 below. As part of the Option grant, the Company and one Optionee agreed to cancel an aggregate of 15,000,000 stock options granted to that Optionee on September 1, 2020 that were exercisable at a price of $0.01 per share.
The Shares and Warrants above were issued in private transactions in reliance upon the exemption from registration provided by Rule 903 of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Company’s reliance on Rule 903 of Regulation S was based on the fact that DIP is not a “U.S. person” as that term is defined in Rule 902(k) of Regulation S, that the holder acquired the Shares and Warrants for investment purposes for his own account and not as nominee or agent, and not with a view to the resale or distribution thereof, and that he understood that the Shares and Warrants may not be sold or otherwise disposed of without registration under the Securities Act and any applicable state securities laws, or an applicable exemption or exemptions therefrom.
The Options were granted to Optionees in private transactions in reliance upon the exemptions from registration provided by Section 4(a)(2) of the Securities Act and Rule 903 of Regulation S promulgated under the Securities Act. The Company’s reliance on Section 4(a)(2) was based on the fact that the grants to U.S. persons did not involve a “public offering” and the applicable Optionees provided representations to the Company that they acquired the Options for investment purposes and not with a view to any resale, distribution or other disposition in violation of United States securities laws or applicable state securities laws. The Company’s reliance on Rule 903 of Regulation S was based on the fact that the relevant Options were granted in “offshore transactions”, as that term is defined in Rule 902(h) of Regulation S. The Company did not engage in any directed selling efforts in the United States in connection with the granting of the applicable Options, and the relevant Optionees were not U.S. persons and did not acquire the Options for the account or benefit of any U.S. person.
